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Will North Carolina Expand Medicaid?

In the face of several states expanding Medicaid, and with citizens this past week in Idaho rallying for a “clean implementation” of the expansion without any restrictions, it is worthwhile to consider whether North Carolina will be joining their ranks. The state’s governor, democrats and a handful of its republicans have been striving for two years to extend coverage to non-elderly adults with incomes up to 133% of the federal poverty level, despite a republican house and senate. Recent changes in the legislative makeup from the November 2018 election, in addition to other pressures, however, provide fuel for the fight to expand.

North Carolina’s Current State of Politics

After the November 2018 election, the Democrats broke Republican super-majorities in both chambers of North Carolina’s legislature, the General Assembly. There will, thus, no longer be a veto-proof majority in either the House or Senate. In other words, Republicans won’t be able to overturn Governor Roy Cooper’s (D) vetoes without at least some democratic support. This also means that Governor Cooper and the Democrats will have more negotiating power, which could either lead to more compromise or legislative gridlock. Of the change, House Speaker Tim Moore (R) said, “When we had a veto-proof majority, we knew we had the final say, not having a veto-proof majority, we know there’s going to be more (need for) consensus.”

This negotiating power will come in handy as Democrats have an eye on expanding Medicaid. Most Republicans have long been staunchly opposed to expanding Medicaid on cost grounds. Senator Philip Berger (R), President Pro Tempore of the North Carolina Senate said, “Me personally, I’ve yet to see a specific proposal on Medicaid expansion that, in my view, does not create significant fiscal hurdles for the state down the road. And that, for me, is kind of the key.”

Recent History of Medicaid Expansion

The Governor has long made expanding Medicaid coverage a foremost task, despite Republican and legal roadblocks. His first budget proposal called for its expansion. In October 2018, CMS gave approval to implement the heart of the state’s 1115 waiver: the transition to Medicaid managed care. Unsurprisingly, CMS rejected an amendment of the waiver that attempted to expand Medicaid with work requirement, otherwise known as Carolina Cares.

The bipartisan Carolina Cares program was a sort of backdoor route to Medicaid expansion led by a handful of House Republicans. Introduced in April 2017, the “skin in the game” legislation proposed to have low-income adults in the workforce pay into a health care plan without contributions from state coffers. Failing to earn Republican traction in the House, it did not advance beyond the committee from 2017 into 2018. Based on this lack of legislative support, CMS rejected the Carolina Cares portion of the waiver.

Considering Governor Cooper was legally barred from unilaterally expanding Medicaid by the legislature in 2013, he sees Carolina Cares as a politically feasible way to expanding coverage.

Medicaid Expansion in 2019?

With the 2019 legislative session having just started a week ago, momentum behind expanding Medicaid is starting anew. Governor Cooper is almost certain to again put expansion in his budget proposal around March 1. He could use it as a bargaining tool in budget debates now that Democrats have gained more seats.

As for the Carolina Cares legislation, it will likely be one of the first big topics of the session. All five House Republican sponsors of the bill have won re-election. The lead sponsor, Representative Donny Lambeth (R) has already been in talks with Speaker Moore on getting the legislation moving again. House Republicans are also planning on bringing up the bill during budget talks.

While things may appear to be slightly hopeful in the House, the real fight is in the Senate—the chamber that’s always been more reluctant to alter Medicaid. The House can unanimously support the bill, but without the Senate’s support the bill is sent to the graveyard. There’s a good chance that for the Senate to sign onto Carolina Cares, Senate leadership will ask for a big priority in return.

Senator Ralph Hise (R), a leader on health care issues said of expansion, “It’s a conversation. There are more conversations coming from the House.” He added that this won’t be an issue settled easily or early in the session.

Under Pressure

It seems that the question of whether Medicaid will expand is largely an unpredictable political one. There are, however, increasing pressures to expand from medical providers and hospital administrators, burdened with the costs of treating an estimated 339,000 uninsured adults in the state.

The legislature could also be influenced by a movement outside North Carolina’s borders. Several typically conservative states are warming up to the idea of Medicaid expansion, with 2018 midterm election decisions by voters in Utah, Nebraska and Idaho to extend Medicaid coverage to their low-income residents.

Follow the Leaders?

Representative Lambeth (R), leader of the Carolina Cares legislation, said there’s a “50/50 chance” North Carolina will expand Medicaid this year.

Mark Hall, a Wake Forest University professor and expert on the health care insurance market, cautioned not to expect a quick turnaround on Republican positions anytime soon. “Since Republicans control both chambers of the General Assembly, [Medicaid expansion] seems unlikely to change in the near future.”

Representative and House Minority Leader Darren Jackson (D) seems to agree with Hall. He said that as much as Democrats may want to see expansion, they can’t call the shots without full bipartisan participation.

As for the Senate, Senator Berger’s spokesperson said, “We typically review and comment on House bills if and when they pass that Chamber.”

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